Current Event: Smart Grids, DERs, and the Economics of Energy

The Answer Is Transaction Costs

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Unlock the secrets of the energy market evolution with economist Professor Lynn Kiesling, who brings her expertise on transaction costs and the digital transformation of the electricity industry to our table. Our energized discussion orbits around the innovative world of Distributed Energy Resources (DERs), where we explore the shift from consumers to proactive producers, thanks to technologies like rooftop solar panels and home energy storage. Professor Kiesling, drawing from her academic journey and reverence for Ronald Coase's work, delves into the institutional structure of production within firms and imparts her wisdom on navigating the complex regulatory frameworks that shape our smart grid technologies.
Also, 4 new TWEJ's, and a letter. It's the January TAITC!

• This month's guest: Lynne Kiesling: https://lynnekiesling.com/
• Our paper: Theisen, Kiesling, and Munger, "Airbnb to solar: electricity market platforms as local sharing economies." Public Choice: 2022
• Lynne's Substack: "Are We Talking Ourselves Out of Progress?"
• Lynne's Substack: "Pareto-relevant Externalities (You don't have to internalize everything, folks!)

Links:

• Buchanan and Stubblebine, "Externality." Economica.
• Russ Roberts and the parable of the wind and the sun: https://www.econtalk.org/david-mcraney-on-how-minds-change/
• Amory Lovins (cold beer, hot shower, "Nega-Watts"): https://en.wikipedia.org/wiki/Amory_Lovins
• Ohtani's contract, from REASON: https://reason.com/2023/12/15/baseball-star-shohei-ohtanis-new-contract-is-a-massive-tax-avoidance-scheme-nice/

If you have questions or comments, or want to suggest a future topic, email the show at [e-mail] !

You can follow Mike Munger on Twitter at @mungowitz

Chapter

1. Transaction Costs in the Energy Industry (00:00:00)

2. Exploring Contributions and Classes in Energy (00:16:55)

3. Smart Grid and Distributed Energy Resources (00:28:40)

4. Digitization and Transactive Energy in Grids (00:43:47)

5. Electric Vehicles, Externalities, and Government Subsidies (01:00:27)